Nike is suing StockX for unauthorized use of Nike IP in StockX's digital sneaker NFTs.
Less than a month after StockX’s Vault NFT launch, Reuters reports that the online resale marketplace has been sued by Nike for "selling unauthorized images of Nike shoes.” According to the Reuters report which broke early Thursday evening, Nike said that “StockX’s NFTs infringe its trademarks and are likely to confuse consumers.” The lawsuit “asked for unspecified money damages and an order blocking their sales.”
Based on official court documents acquired by Complex's Brendan Dunne, the "lawsuit arises from Defendant StockX's unauthorized and infringing use of Nike's famous marks in connection with StockX's entry into the Non-Fungible Token market."
Detroit-based StockX was recently valued at more than $3.8 billion and is rumored to be on the brink of an IPO. According to Reuters, representatives from both StockX and Nike “did not respond to a request for comment.”
The new service - coined NFT Vault - ties non-fungible tokens (NFTs) to physical sneakers stored in StockX’s secure facilities, offering holders the ability to redeem tokens for physical versions of the shoes “in the near future” - such feature was not made available on the onset of the launch, and remains to be available for holders.
According to Reuters, Nike’s complaint said that StockX has sold “over 500 Nike-branded NFTs.” Furthermore, the complaint argues that “Nike’s business reputation” has been hurt as a result of buyers’ doubts surrounding StockX’s actions as well as the inflated prices and questionable terms of purchase and ownership on the marketplace platform.
Following Nike’s acquisition of digital art studio RTFKT in December of 2021, the sneaker giant told Reuters that it plans to “release a number of virtual products” later this month.
While the launch of StockX’s Vault NFT project prompted an array of questions, many questioned if the resale giant had worked out an agreement with Nike to allow such use of IP, or if they were doing so without consent. Clearly, it appears to have been the latter.
Should Nike decide to file for an injunction against StockX’s use of Nike’s IP in its digital assets, there is the chance that the resale marketplace would be restricted from selling any such further assets to its users or allowing trades on its platform until a ruling or settlement has been made.
Stay tuned as more information on this ongoing legal matter develops between Nike and StockX.